Jose Gomez seals the roof of a Model S at Tesla's plant in Fremont. Tesla plans to start delivering the sedans Friday.

Photo: Erik Verduzco, Special To The Chronicle

Jose Gomez seals the roof of a Model S at Tesla's plant in Fremont....

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Side-door panels for the Model S sedan wait for assembly at the Tesla factory in Fremont. The U.S. government loaned Tesla $465 million to aid in the renovation of the former Nummi plant.

Photo: Erik Verduzco, Special To The Chronicle

Side-door panels for the Model S sedan wait for assembly at the...

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A completed Tesla Model S sedan sits at the end of the assembly line at Tesla's factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

A completed Tesla Model S sedan sits at the end of the assembly...

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Machines are used to assemble parts for Tesla's Model S sedan at the factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

Machines are used to assemble parts for Tesla's Model S sedan at...

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Gilbert Passin, Tesla's head of manufacturing, gives a tour of the factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

Gilbert Passin, Tesla's head of manufacturing, gives a tour of the...

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A Tesla sign decorates inside the factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

A Tesla sign decorates inside the factory in Fremont, Calif.,...

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A completed Tesla Model S sedan sits at the end of the assembly line at Tesla's factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

A completed Tesla Model S sedan sits at the end of the assembly...

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A completed Tesla Model S sedan sits at Tesla's factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

A Model S sedan is built at Tesla’s Fremont factory in 2012. The company repaid its loan early.

Photo: Erik Verduzco / Special To The Chronicle

A Model S sedan is built at Tesla’s Fremont factory in 2012. The...

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A Tesla Model S sedan waits to be completed at the assembly line at Tesla's factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

A Tesla Model S sedan waits to be completed at the assembly line at...

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Tesla CEO Elon Musk talks with shareholders during its annual shareholders meeting at the Computer History Museum in Mountain View on Wednesday, June 6, 2012.

Photo: Susana Bates, Special To The Chronicle

Tesla CEO Elon Musk talks with shareholders during its annual...

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Machines are used to assemble parts for Tesla's Model S sedan at the factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

Machines are used to assemble parts for Tesla's Model S sedan at...

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A poster board shows the general assembly operation for Tesla's Model S sedan at the factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

A poster board shows the general assembly operation for Tesla's...

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Assembly parts are lined up at the Tesla factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

Assembly parts are lined up at the Tesla factory in Fremont,...

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Assembly parts are lined up to be assembled at the Tesla factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

Assembly parts are lined up to be assembled at the Tesla factory in...

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A Tesla Beta Prototype electric car is on display after an annual shareholders meeting at the Computer History Museum in Mountain View on Wednesday, June 6, 2012.

Photo: Susana Bates, Special To The Chronicle

A Tesla Beta Prototype electric car is on display after an annual...

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Assembly parts are lined up to be assembled at the Tesla factory in Fremont, Calif., Wednesday, June 13, 2012. On June 22, Tesla Motors will begin delivering its all-electric Model S luxury sedan. It is only the second car ever produced by Tesla, and first to be built at Tesla's own factory.

Photo: Erik Verduzco, Special To The Chronicle

Assembly parts are lined up to be assembled at the Tesla factory in...

On a gleaming white factory floor in Fremont, workers buzz over freshly assembled cars that represent the future of Tesla Motors.

The workers search for flaws. They check the paint, the wiring, the fit of door against body. They run the cars over a bumpy indoor track to simulate rough roads. They douse the cars with pressurized water to make sure nothing leaks.

The cars - sleek, sumptuous and powered only by electricity - are the Model S. The S is only the second model introduced by Tesla and the first that the upstart automaker will build on its own. Tesla plans to start delivering the luxury sedans to customers Friday.

"That's the kind of focus these guys have - making sure everything is right," said Gilbert Passin, Tesla's vice president of manufacturing, as a team of "quality auditors" examined a car under banks of bright lights last week. "We have, obviously, a lot to achieve."

The Model S introduction is a make-or-break moment for Tesla.

The Palo Alto company gained near-cult status with its first offering, the Tesla Roadster, a ferocious sports car that made electric vehicles sexy. Driven by A-list actors and political luminaries, the Roadster helped turn Tesla's chief executive officer, Elon Musk, into a Silicon Valley celebrity long before his other company, SpaceX, launched the first private supply ship to the International Space Station earlier this year.

But with a starting price of $109,000, the Roadster was never meant for the masses. Production was limited to 2,500 and ended last year.

The Model S, in contrast, starts at $57,400 and ranges up to $105,400, before state rebates and federal tax incentives are factored in. Tesla plans to make more than 5,000 this year and 20,000 next year.

Infiltrating the market

It's all part of Tesla's long-term strategy to infiltrate the mass market bit by bit, from the top down. Each car model the company introduces is supposed to be less expensive - and made in larger quantities - than the last.

Starting with the low-volume Roadster gave Tesla time to perfect its technology and develop its supply chain before moving on to mass production. The Model S may be more utilitarian than the Roadster, seating five adults instead of two and taking 4.4 seconds to go from zero to 60 mph, instead of the Roadster's 3.7 seconds. But it makes the Roadster's high-performance technology affordable to more people, even if it still isn't cheap.

In some ways, the Model S represents an improvement. The most expensive of the car's three battery pack options can go 300 miles on a single charge. The Roadster could only drive 245 miles on a charge. A planned crossover-SUV, dubbed the Model X, will follow next year, built on the same platform as the Model S.

"People were buying the Roadster as a curiosity," said Jeremy Anwyl, chief executive officer of the Edmunds.com auto information website. "It wasn't a mainstream vehicle. With the S, they're trying to move into the mainstream. And it's going to be really interesting."

Until now, Tesla has functioned as a classic Silicon Valley startup, designing a high-tech product and paying someone else to make it. Lotus Cars of England built most of the Roadster, with Tesla handling just the final assembly.

With the Model S, Tesla becomes a manufacturer. The company bought Fremont's shuttered New United Motor Manufacturing Inc. (Nummi) plant in 2010 and refurbished part of it to build the Model S. The federal government helped bankroll the renovations with a $465 million loan.

Tesla, which went public with an initial stock offering in 2010, now employs more than 1,700 people. It will sell the Model S through a network of Tesla stores spanning North America, Europe and Asia.

"Up to this point they've been doing very well, but it really comes down to how the Model S launch goes," said Ben Schuman, senior research analyst with Pacific Crest Securities. "Whether they can produce vehicles at high volume without flaws - that's still to be determined."

Betting the future

Tesla has bet its financial future on the Model S. The company has lost money every year since its founding in 2003 - $254 million in 2011 alone. More than 10,000 people have put down $5,000 apiece to reserve a Model S. Musk estimates that the company needs to sell 8,000 per year to reach profitability. He expects the company to hit that milestone next year.

Tesla employees and shareholders, however, aren't the only people with a stake in the new car's success. Fans of electric vehicles hope the Model S will stoke public interest in all plug-in cars. Sales of the electric Nissan Leaf and the plug-in hybrid Chevy Volt have been lackluster in much of the country, with California a notable exception.

Unlike the Model S, neither the Leaf nor the Volt could be considered a luxury car. And the Leaf's battery range is less than half that of the Model S - about 73 miles per charge. But if it proves to be a hit, the Model S could still serve as a "halo car," casting a favorable light on other electrics.

"The S is supremely important, just because of the moment it's arriving," said Felix Kramer, founder of CalCars, a plug-in vehicle advocacy group. "It's at this moment when electric cars are finally coming, and their success isn't guaranteed. Getting some home runs now would really help. The S looks like it's going to be a home run."

Political profits

The Obama administration also wants a win. Its clean-tech loans have been under fire since solar module maker Solyndra, based 1 mile from Tesla's factory, went bankrupt last year despite collecting $528 million in federal money. Republicans have targeted Tesla in particular, saying the federal government had no business funding boutique cars for the rich.

GOP presidential candidate Mitt Romney, in an opinion piece published by the Orange County Register last fall, criticized the loans to Tesla and its Southern California rival, Fisker Automotive, which makes luxury hybrids. Both companies, he noted, received financial backing from Democratic donors. In Tesla's case, the donors included both Musk and former California state Controller Steve Westly.

"Alas, like Solyndra, these loans are turning out to be historic opportunities to line the pockets of major campaign fundraisers," Romney wrote.

Tesla countered that it had applied for its loan during the Bush administration.

Given Tesla's short history, analysts say the company needs a glitch-free launch to make the Model S a success. Even minor technical problems could attract intense scrutiny.

"Getting the quality right is really critical," Anwyl said. "When you're dealing with a new company, and it's considered a risk to begin with, anything that reinforces that impression of risk is a problem. The marketplace is a lot less forgiving than it used to be."

Tesla timeline

Some key moments in Tesla Motors history:

July 2003: Company founded by Martin Eberhard and Marc Tarpenning.

April 2004: PayPal co-founder Elon Musk invests in Tesla and joins its board.

November 2007: Eberhard forced out of the company in a dispute with Musk.

February 2008: Delivery of Tesla Roadster.

October 2008: Musk becomes CEO.

June 2009: Federal government awards Tesla a $465 million loan to help build the Model S sedan.

May 2010: Tesla buys the closed Nummi plant for $42 million. Tesla also buys some of the plant's equipment for $17 million.

June 2010: Tesla stock starts trading on Nasdaq exchange at $17 per share.